County could save $1M with bond change
The county board will spend money with the hopes of earning it back and much more.
Finance Director Donna Welsh outlined a plan Tuesday to reclassify about $9.4 million owed on a bond for the Mower County Jail and Justice Center.
By reclassifying the current lease revenue bond as a general obligation (GO) bond, the county could save more than a million dollars in interest costs.
“It could be substantial,” Commissioner Jerry Reinartz said of the savings.
The board will first have to spend money in legal fees and consultations to ensure the move is possible. The board unanimously voted to spend about $5,000 to research the change, and could spend a total of $10,000. The board hasn’t approved seeking the reclassification yet and will wait until more details are available.
Commissioner Tim Gabrielson said the potential savings would be worth the upfront costs.
“If you can get a better interest rate, you should do it,” Gabrielson said.
County Attorney Kristen Nelsen was quick to stress that there will be no additional bonds spent, the restructuring would only address existing bonds on the project.
Welsh said the county can only restructure the existing bond if it saves 3 percent or more, which she estimates they’ll save if interest rates remain favorable.
Welsh said GO interest rates have been hovering around — if not below — 2 percent. However, she asked to board to work fast, because interest rates are expected to increase in coming months.
If the board opts to move forward, the earliest the county could reclassify the loan would be by late February or March. Among other steps, the board would have to host a public hearing outlining the change. If interest rates increase quickly, it would reduce the likelihood of any savings.
Welsh said she doesn’t anticipate there to be opposition to the change, because the move would save taxpayers money on existing bonds that have to be paid back in the coming years.
The county’s five-year capital improvement plan took a step forward Tuesday.
The county agreed to a deal with the city of Austin to utilize the services of city Finance Director Tom Dankert.
The county will pay the city $70 an hour, and Dankert will aid the county in developing the capital improvement plan.
Dankert has put together the city’s capital improvement plan for several years, but the county has never had such a plan.
The Austin City Council approved the proposal Jan. 17.
Dankert previously said the city has successfully teamed up with the county on many services over the years, including a joint housing program and Austin Mower County Area Transit.
Winter is back, and officials are asking for patience as they work to clear roads.
“We’ve got every unit out that we can get out now,” said Public Works Director Mike Hanson Tuesday.
Hanson said bare pavement will take time on less traveled roads because salt is expensive, so the drivers only use it at key areas like curves, stop signs and hills.
“It’s expensive if you want bare pavement,” he said.
Despite the focus on snow, Hanson is already looking ahead to construction season. The county will finish paving County Road 2, which was torn up last year and has been left as gravel over the winter.
The board will accept bids on the project Feb. 27.